Value Maximization

The ultimate prize in exit planning is to achieve the maximum value for the offered company. This is accomplished by the following:

  1. Seeking advice from exit planners, accountants, lawyers, estate planners, insurance brokers and any other resource that educates the owner regarding how to maximize the value of the business and structure a deal that will minimize taxes and will best support their investment and retirement plans
  2. Creating and following a well constructed exit plan
  3. Focusing company efforts on implementing identified changes that will enhance the value of a company to the prospective buyer
  4. Identifying and searching for strategic buyers
  5. Creating a well constructed offering document
  6. Selecting the right Investment Banker or Business Broker to help sell your business
  7. Using an expert in negotiating the sale of the business.  Often business owners have too much at stake, have too much information, and are not the best at negotiating the sales transaction.

Offering Memorandum

For middle market companies, an offering memorandum consisting of a seller profile, a non-disclosure statement, a detailed offering memorandum is usually developed to promote the sale of the business.

The purposes of this document:

  1. Tells the company's story
  2. Provides relevant facts buyers want to know, including legal structure of the company, ownership, key management, organizational chart, customer breakdown, asset descriptions, marketing capabilities, and historical financial performance
  3. Defines potential growth opportunities
  4. Suggests synergies or economies of scale
  5. Offers proposed deal structure

Business Broker

Business Brokers have typically focused on selling companies less than $10 million in size, although increasingly they are handling larger and larger transactions.  They often represent the seller and their role is to find buyers for the offered company.  They can be an excellent resource to find local buyers, investors who specialize in specific industries, or private equity funds.  They are experienced in finding buyers and helping the company to negotiate and close a sale.

They also are a good source to conduct valuations.

Investment Banker

An individual or institution who acts as an underwriter or agent for corporations and municipalities issuing securities. Many investment bankers also maintain broker-dealer operations, maintain markets for previously issued securities, and offer advisory services to investors.

Investment banks also have a large role in facilitating mergers and acquisitions, private equity placements, and corporate restructuring. Typically, investment bankers represent companies with more than $10 million in revenue.

They can be valuable in doing the following:

  1. Generating a valuation for your business
  2. Provide access to their network of financial and institutional buyers
  3. Provide access to buyers outside of the local area
  4. Conducting a controlled auction for your business